Markets overshoot, and they correct...both ways. I don't forget that the dizzy top of 6th September 2011 was followed by a $400 per ounce reverse in 3 weeks.

Neither do I forget that currencies with large debt overhangs, run by governments which have extreme fiscal problems, will tumble into unpredictable and spectacular failure sooner or later.

That's neither a unique nor brilliant insight and very large numbers of people agree with me. We shouldn't be too surprised when a few of them sell during counter-trend phases of a complicated journey.

Here's a thought which reminds me to keep my cool.

The significant majority of the tiny number who eventually succeed in holding onto their wealth through a failure of their currency will be those who acted as the storm gathered, and bought gold. By the end they will have been through the mill, having endured countless hours of anguished doubt. But when the market tests them, with temporary movements against them, they will be resolute, provided of course they have the fundamental confidence in their own judgement of the process of their national economic unravelling. This is what it takes to be a successful investor through the failure of a money system.

I believe I am still on the right side of the long term decline of Sterling, even if I also believe that market commentators will, for a while, be right as gold bears. In time I expect the upturn to be as sharp as this setback. Were I to sell before that upturn I doubt I could trust myself to switch fast depreciating Sterling back into gold at suddenly higher prices. It would be just too painful.

Markets don't offer smooth passage. They pitch up after each trough and slump over every crest. It gets rough from time to time, so you batten down the hatches, point her steadfastly to the wind, and trust she'll take the beating. She will, if you hold your course.

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